How do IB traders make money?
Hey guys,
So I was wondering how do IB traders make money? From my understanding, prop shop traders just invest the firm's money, while IB traders execute client's orders? If so, how do they make money?
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Bid-ask spread It's called market making
IBs also have proprietary trading desks. However, they have been winding down these operations due to regulations passed on risk taking post 2008.
I feel like this was part of a thread from a few days ago
But doesnt that make the job extremely boring, since you're just executing client's orders? what kind of independence do you have?
You are such a cunt. A nobody comes along and labels execution trading as boring. I was about to help you, but this just sealed the deal.
For Christ's sake calm down. It was a question, not a statement. I didn't say it was boring, I simply said that my understanding of the job, at that point, led me to conclude that it was boring. After I got replies, I certainly don't think so anymore. There is no need to start acting like a prima donna during that time of the month.
But doesnt that make the job extremely boring, since you're just executing client's orders? what kind of independence do you have?
You quote prices for the client and manage risk. This is a good demo to give you a sense of what sell-side trading entails:
http://live.marketsims.com/TSDemo/
[quote=aintnospam]You quote prices for the client and manage risk. This is a good demo to give you a sense of what sell-side trading entails:
http://live.marketsims.com/TSDemo/[/quote]
huh.....
[quote=aintnospam]You quote prices for the client and manage risk. This is a good demo to give you a sense of what sell-side trading entails:
http://live.marketsims.com/TSDemo/[/quote]
The demo is quite interesting. I'm just wondering if the job is as intensive as shown in the demo, or maybe even more?
Does anyone else find this comment absolutely hilarious?
read Liars Poker
What do traders in an IB do EXACTLY? (Originally Posted: 01/26/2014)
I have a very hard time understanding what traders in investment banks do. It seems like every time someone asks this on a forum, a ton of vague answers like "they make markets", etc get through out. I know what the sales people in the sales and trading division of an investment bank do, they generate trade ideas to clients such as hedge fund managers and get a commission if the client bites.
However, it seems that no one really knows what traders do. Do they prop trade? (I know they dont really anymore ever since the financial crisis) Do they act as brokers and only execute trades? What exactly do they do?
Because it seems that if their only role was to execute trades, then isnt that what a broker is? And why would there be so much talk about the P&L of a trader and why would they even need to do analysis of the markets and keep abreast of whats going on?
A concise answer would be greatly appreciated!
okay ok ok okay so what is it that you are asking about EXACTLY ??
like i thought, another guy here who has no idea what trading is but still leaves a response...
Traders are in charge of whatever securities the bank holds. When a sales guy brokers a transaction, the trader executes them. They are in charge of giving bid/ask to the sales guy who then gives it to the client. They protect the bank by making sure securities aren't sold at a loss and trying to make money off the spread. Ultimately they are responsible for the P&L (profit and loss) for the banks securities.
Posting the same question in two different forums (fora?) is an annoying thing to do... Looks like people have already given you the answer, but you weren't listening.
I am not completely sure, but most traders are market makers/brokers. Handling the flow of clients. Flow can be taken on the book or traded out on the market. Some of the flow is basic eg equity and some of the flow is more complex like variance swaps. As trader it is your duty to trade these products, pricing them and managing the risk of your book. I do think some banks do make risk trades, more like prop trading even though it is prohibited.
I would have answered that question, but given you've spammed it on the forum under different titles I'll just throw you monkey shi.t
I wouldn't worry about it, you're at no risk of ever becoming one.
lol
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